The rental crisis afflicting the U.S. will only become more acute in the years ahead, and the number of households paying more than 50 percent of their income to rent is expected to grow 11 percent by 2025, according to a new study.
Today, 11.8 million households spend more than half their income on rent, but that number will increase to 13.1 million over the next decade even as the housing crisis abates, Harvard University’s Joint Center for Housing Studies and Enterprise Community Partners found in a new analysis released Monday.
Demographic changes will drive the strains on housing. In particular, larger numbers of lower-earning minority families seeking housing will turn to a limited supply of rental units, as will millions of seniors with fixed incomes. Furthermore, the study’s authors note, some Generation X families that still have yet to recover from the subprime crisis will rely on renting.
The effect will be to worsen what Department of Housing and Urban Development head Julian Castro has termed an “affordable housing crisis.” Castro’s agency defines families that spend more than 30 percent of their income on housing as “burdened,” and warns that they may have trouble affording other necessities.
Christopher Herbert, managing director of the Harvard housing group, called on Congress and local governments to boost affordable housing, and warned that “there are simply not enough quality, affordable rental units to provide housing for the millions of households paying over half their income in rental costs.”
In the most recent data, according to the study, “11.2 million extremely low-income households competed for 7.3 million units affordable to them — a 3.9 million unit shortfall.”
That shortfall will grow over the next 10 years in the study’s baseline, which assumes that both rents and income grow at the same pace as inflation.
Only if income growth exceeds rent growth by 1 percent would the number of renters straining to make monthly payments drop, the study concluded.
Even as the unemployment rate has fallen, foreclosures have dropped, and housing values recovered, the prospects for renting have gotten worse across the country.
The issue has drawn attention from the housing industry. In turn, the industry has tried to draw the attention of presidential candidates to affordable rental housing.
